iThink | How Covid-19 made digitalization the new necessity

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I came across this meme last week and couldn’t help but chuckle:

Before I go any further, I just want to make it clear that I am not making light of this situation that we’re all in right now. This virus has now infected almost three million people, taken nearly 200,000 lives, and has wrought trillions worth of economic damage, leaving millions unemployed and entire industries in peril. It is a global disaster, and I am with the rest of the world in doing my part (staying mostly home) and praying for this to end.

But seeing that meme, which I found in a Forbes.com article, let me have a light moment as I considered the speed with which we were all suddenly made to live out a new normal. For context, I work with a 168-year-old bank that is older than the Republic of the Philippines, the country it calls home. It’s a bank that has pretty much seen two world wars, several revolutions, and also, global pandemics such as the Spanish Flu of 1918.

Our bank has been on what we call a “digitalization journey” for the last five years or so. Our leaders had the good sense that digital banking was the way of the future and so we embarked on a multi-phase process of turning our massive ship, with its more than 8 million clients, legacy systems, and deeply entrenched culture, towards the digital north.

While the bank may have had a highly digital culture, the results for our customers had been a mixed bag. Many of our younger clients were quick to take it up and embraced the reduction of human interaction needed to perform basic banking transactions. On the other hand, many of our older customers (who incidentally were usually of higher net worth) just couldn’t quite get on board.

For several years, we took a high-tech, high-touch approach, where we gave both markets the platforms they needed. Our online banking website and mobile app have the highest number of functionalities for among Philippine banks, allowing our users to maximize them. I know some people who haven’t had to step inside a bank branch in over a year because they can do everything digitally.

We also maintained our branches and enhanced the banking experience for our less tech-savvy clients who enjoyed the personal rapport they’ve established through dedicated relationship managers and branch staff. Before Covid-19 happened, around 70% of our transactions were done digitally, while the rest were done through the branches.

And then there was Covid-19. Digital adopters found themselves adjusting to the requirements of the Enhanced Community Quarantine (ECQ) over Metro Manila and the entire island of Luzon (along with other major regional cities such as Cebu, Iloilo, and Davao) as they quickly found that they can still receive their salaries, order groceries, and other essentials and make everyday transactions (such as transferring funds and paying bills) online.

Those who refused to ride the digital wave suddenly found themselves at a loss. Clients who only have passbook accounts without ATM cards didn’t know how they can withdraw money because the branches near their homes have been closed.

To help them out, we released advisories on how they can register online from the safety of their homes. Their relationship managers also stayed in touch to assist them with their needs as much as they could within the limits of the ECQ.

In the month since the ECQ, we’ve seen the rate of digital transactions swing to 92%, and over 100,000 new sign-ups for our digital channels. We have clients who are, for the first time, checking their credit card bills and statements of account online for the first time.

Being a developing country, the Philippines actually has a dismally low percentage of the adult population involved in the formal financial sector. Seventy-five percent of Filipinos are unbanked, making it more difficult for our government to distribute financial aid to those who desperately need it. Citizens of advanced nations are able to get “stimulus funds” or unemployment benefits within hours of filing their applications because their government agencies are able to directly deposit it to them with certainty that the money is going to the intended recipients.

Just as Covid-19 proved to be the push that our clients needed to ride the digital wave, I hope this also serves as the push for genuine financial inclusion for all Filipinos. As this situation is showing us all, digitalization could save both lives and livelihoods.

The author is the vice president and head of corporate affairs & communications of BPI and is concurrently the executive director of BPI Foundation

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